When used in this Chapter, the definitions of G.S. 78A-2
shall apply along with the following, unless the context otherwise requires:

(1) "Investment adviser" means any person
who, for compensation, engages in the business of advising others, either
directly or through publications or writings, as to the value of securities or
as to the advisability of investing in, purchasing, or selling securities, or
who, for compensation and as part of a regular business, issues or promulgates
analyses or reports concerning securities. "Investment adviser" also
includes financial planners and other persons who, as an integral component of
other financially related services, provide the foregoing investment advisory
services to others for compensation and as a part of a business or who hold
themselves out as providing the foregoing investment advisory services to
others for compensation. "Investment adviser" does not include:

a. An investment adviser representative or a person
excluded from the definition of investment adviser representative pursuant to
G.S. 78C-2(3)c.

b. A bank, savings institution, or trust company.

c. A lawyer, accountant, engineer, or teacher whose
performance of any such services is solely incidental to the practice of his
profession.

d. A dealer or its salesman whose performance of these
services is solely incidental to the conduct of its business as a dealer and
who receives no special compensation for them.

e. A publisher of any newspaper, news column,
newsletter, news magazine, or business or financial publication or service,
whether communicated in hard copy form, or by electronic means, or otherwise,
that does not consist of the rendering of advice on the basis of the specific
investment situation of each client.

f. A person solely by virtue of such person's
services to or on behalf of any "business development company" as
defined in Section 202(a)(22) of the Investment Advisers Act of 1940 provided
the business development company is not an "investment company" by
reason of Section 3(c)(1) of the Investment Company Act of 1940, as both acts
were in effect on June 1, 1988.

g. A personal representative of a decedent's estate,
guardian, conservator, receiver, attorney in fact, trustee in bankruptcy,
trustee of a testamentary trust, or a trustee of an inter vivos trust, not
otherwise engaged in providing investment advisory services, and the
performance of these services is not a part of a plan or scheme to evade
registration or the substantive requirements of this Chapter.

h. A licensed real estate agent or broker whose only
compensation is a commission on real estate sold.

i. An individual or company primarily engaged in
acting as a business broker whose only compensation is a commission on the sale
of a business.

j. An individual who, as an employee, officer or
director of, or general partner in, another person and in the course of
performance of his duties as such, provides investment advice to such other
person, or to entities that are affiliates of such other person, or to employee
benefit plans of such other person or its affiliated entities, or, with respect
to such employee benefit plans, to employees of such other person or its
affiliated entities.

k. Any person excepted from the definition of
investment adviser under the Investment Advisers Act of 1940 or any rule or
regulation promulgated under that act.

l. An employee of a person described in subdivision
b., e., f., g., h., or j. of G.S. 78C-2(1) acting on behalf of such person
within the scope of his employment.

l1. An investment adviser who is covered under federal
law as defined in subdivision (4) of this section.

m. Such other persons not within the intent of this
subsection as the Administrator may by rule or order designate.

(2) "Investment Advisers Act of 1940" means
the federal statute of that name as amended before or after the effective date
of this Chapter.

(3) "Investment adviser representative"
means, with respect to any investment adviser registered under this Chapter,
any partner, officer, director (or a person occupying a similar status or
performing similar functions) or other individual employed by or associated
with an investment adviser, except clerical or ministerial personnel, who:

c. Determines which recommendations or advice
regarding securities should be given; provided, however if there are more than
five such persons employed by or associated with an investment adviser, who do
not otherwise come within the meaning of G.S. 78C-2(3) a., b., d., or e., then
only the direct supervisors of such persons are deemed to be investment adviser
representatives under G.S. 78C-2(3) c.,

d. Solicits, offers or negotiates for the sale of or
sells investment advisory services, unless such person is a dealer or salesman
registered under Chapter 78A of the General Statutes and the person would not
be an investment adviser representative except for the performance of the
activities described in G.S. 78C-2(3) d., or

e. Directly supervises investment adviser
representatives as defined in G.S. 78C-2(3) a., b., c. (unless such investment
adviser representatives are already required to register due to their role as
supervisors by operation of G.S. 78C-2(3) c.), or d. in the performance of the
foregoing activities.

Notwithstanding this
subdivision, the term "investment adviser representative" as used in
this Chapter and as applied to a person who is employed by, or associated with,
an investment adviser covered under federal law only includes an individual who
(i) has a "place of business" in the State, as that term is defined
in rules or regulations adopted or promulgated under section 203A of the
Investment Advisers Act of 1940 by the United States Securities and Exchange
Commission and (ii) either:

a. Is an "investment adviser representative"
as that term is defined in rules or regulations adopted or promulgated under
section 203A of the Investment Advisers Act of 1940 by the United States
Securities and Exchange Commission; or

b. Is not a "supervised person" as that term
is defined in rules or regulations adopted or promulgated under the Investment
Advisers Act of 1940 by the United States Securities and Exchange Commission
and who solicits, offers, or negotiates for the sale of, or who sells,
investment advisory services on behalf of an adviser covered under federal law.

(4) "Investment adviser covered under federal
law" means any adviser who is registered with the Securities and Exchange
Commission under section 203 of the Investment Advisers Act of 1940 (15 U.S.C.
§ 80b-3).

(a) It is unlawful for any person who receives,
directly or indirectly, any consideration from another person for advising the
other person as to the value of securities or their purchase or sale, whether
through the issuance of analyses or reports or otherwise,

(1) To employ any device, scheme, or artifice to
defraud the other person,

(2) To engage in any act, practice, or course of
business which operates or would operate as a fraud or deceit upon the other
person, or

(3) Acting as principal for his own account, knowingly
to sell any security to or purchase any security from a client, or acting as
broker for a person other than such client, knowingly to effect any sale or
purchase of any security for the account of such client, without disclosing to
such client in writing before the completion of such transaction the capacity
in which he is acting and obtaining the consent of the client to such
transaction. The prohibitions of this subdivision shall not apply to any
transaction with a customer of a dealer if such dealer is not acting as an
investment adviser in relation to such transaction.

(b) In the solicitation of advisory clients, it is
unlawful for any person to make any untrue statement of a material fact, or
omit to state a material fact necessary in order to make the statements made,
in light of the circumstances under which they are made, not misleading.

(c) Except as may be permitted by rule or order of the
Administrator, it is unlawful for any investment adviser to enter into, extend,
or renew any investment advisory contract unless it provides in writing:

(1) That the investment adviser shall not be
compensated on the basis of a share of capital gains upon or capital
appreciation of the funds or any portion of the funds of the client (unless
otherwise provided by subsection (d) or (f) below);

(2) That no assignment of the contract may be made by
the investment adviser without the consent of the other party to the contract;
and

(3) That the investment adviser, if a partnership,
shall notify the other party to the contract of any change in the membership of
the partnership within a reasonable time after the change.

(d) Subdivision (c)(1) does not apply to any person who
is exempt from registration under G.S. 78C-16(a)(4) or to the performance,
renewal, or extension of any advisory contract entered into by an investment
advisor at a time when such investment advisor was exempt from registration
under G.S. 78C-16(a)(4). Subdivision (c)(1) does not prohibit an investment
advisory contract which provides for compensation based upon the total value of
a fund averaged over a definite period, or as of definite dates or taken as of
a definite date. "Assignment," as used in subdivision (c)(2), includes
any direct or indirect transfer or hypothecation of an investment advisory
contract by the assignor or of a controlling block of the assignor's
outstanding voting securities by a security holder of the assignor; but, if the
investment adviser is a partnership, no assignment of an investment advisory
contract is considered to result from the death or withdrawal of a minority of
the members of the investment adviser having only a minority interest in the
business of the investment adviser, or from the admission to the investment
adviser of one or more members who, after admission, will be only a minority of
the members and will have only a minority interest in the business.

(e) It is unlawful for any investment adviser to take
or have custody of any securities or funds of any client in contravention of
any rule or order of the Administrator prohibiting, limiting or regulating such
custody.

(f) The Administrator may by rule or order adopt
exemptions from subdivision (a)(3) and subdivisions (c)(1), (c)(2) and (c)(3)
where such exemptions are consistent with the public interest and within the
purposes fairly intended by the policy and provisions of this Chapter. (1987 (Reg. Sess., 1988), c. 1098, s. 1; 2013-91, s. 3(g).)

§ 78C-9. Misleading filings.

It is unlawful for any person to make or cause to be made, in
any document filed with the Administrator or in any proceeding under this
Chapter, any statement which is, at the time and in the light of the
circumstances under which it is made, false or misleading in any material
respect. (1987 (Reg. Sess., 1988), c. 1098, s. 1.)

(a) Neither (i) the fact that an application for
registration under Article 3 of this Chapter has been filed nor (ii) the fact
that a person is effectively registered constitutes a finding by the
Administrator that any document filed under this Chapter is true, complete, and
not misleading. Neither any such fact nor the fact that an exemption or
exception is available means that the Administrator has passed in any way upon
the merits or qualifications of, or recommended, or given approval to any
person.

(b) It is unlawful to make, or cause to be made, to
any prospective customer, or client, any representation inconsistent with
subsection (a) of this section. (1987 (Reg. Sess.,
1988), c. 1098, s. 1.)

(a) It is unlawful for any person to transact business
in this State as an investment adviser unless:

(1) The person is registered under this Chapter;

(2) The person's only clients in this State are
investment companies as defined in the Investment Company Act of 1940, other
investment advisers, investment advisers covered under federal law, dealers,
banks, trust companies, savings institutions, savings and loan associations,
insurance companies, employee benefit plans with assets of not less than one
million dollars ($1,000,000), and governmental agencies or instrumentalities,
whether acting for themselves or as trustees with investment control, or other
institutional investors as are designated by rule or order of the
Administrator;

(3) The person has no place of business in this State,
and during the preceding 12-month period has had not more than five clients,
other than those specified in subdivision (2) of this subsection, who are
residents of the State; or

(4) The person, during the course of the preceding 12
months, has had fewer than 15 clients, and neither holds himself or herself out
generally to the public as an investment adviser nor acts as an investment
adviser to any investment company registered under the Investment Company Act
of 1940, or a company that has elected to be a business development company
pursuant to section 54 of the Investment Company Act of 1940.

(a1) It is unlawful for any person to transact business
in this State as an investment adviser representative unless:

(1) The person is registered under this Chapter; or

(2) The person is an investment adviser representative
employed by or associated with an investment adviser exempt from registration
under subdivision (2), (3), or (4) of subsection (a) of this section; or

(3) The person is an investment adviser representative
employed by or associated with an investment adviser covered under federal law
that is exempt from the notice filing requirements of G.S. 78C-17(a1).

(b) It is unlawful for any person required to be
registered as an investment adviser under this Chapter to employ an investment
adviser representative unless the investment adviser representative is
registered under this Chapter. The registration of an investment adviser
representative is not effective during any period when the investment adviser
representative is not employed by (i) an investment adviser registered under
this Chapter; or (ii) an investment adviser covered under federal law who has
made a notice filing pursuant to the provisions of G.S. 78C-17(a1). When an
investment adviser representative begins or terminates employment or
association with an investment adviser who is registered under this Chapter,
the investment adviser shall notify promptly the Administrator. When an
investment adviser representative begins or terminates employment or
association with an investment adviser covered under federal law, the
investment adviser representative shall, and the investment adviser may, notify
promptly the Administrator.

(b1) No investment adviser representative may be
registered with more than one investment adviser registered under this Chapter
or investment adviser covered under federal law unless each of the investment
advisers which employs or associates the investment adviser representative is
under common ownership or control.

(b2) Notwithstanding subsection (b1) of this section, an
investment adviser representative may be registered with more than one
investment adviser registered under this Chapter or investment adviser covered
under federal law for the purposes of soliciting, offering, or negotiating for
the sale of, or for selling investment advisory services for or on behalf of,
those investment advisers. If an investment adviser representative is
registered with more than one investment adviser pursuant to this subsection,
the representative shall be registered separately with each investment adviser
for whom the representative solicits business and shall provide in writing to
each person solicited any information disclosing the terms of any compensation
arrangement that is related to the representative's solicitation or referral
activities and that is required by the Administrator pursuant to rule or order.
The Administrator may, by rule or order, specify supervisory procedures
consistent with regulations adopted by the United States Securities and
Exchange Commission applicable to investment advisers who compensate persons
for referrals of business.

(c) Every registration or notice filing expires
December 31 of each year unless renewed.

(a) An investment adviser, or investment adviser
representative may obtain an initial or renewal registration by filing with the
Administrator or the Administrator's designee an application together with a
consent to service of process pursuant to G.S. 78C-46(b) and paying any
reasonable costs charged by the designee for processing the filings. The
application shall contain whatever information the Administrator by rule
requires concerning such matters as:

(1) The applicant's form and place of organization;

(2) The applicant's proposed method of doing business;

(3) The qualifications and business history of the
applicant; in the case of an investment adviser, the qualifications and
business history of any partner, officer, or director, any person occupying a
similar status or performing similar functions, or any person directly or
indirectly controlling the investment adviser;

(4) Any injunction or administrative order or
conviction of a misdemeanor involving a security or any aspect of the
securities business and any conviction of a felony;

(5) The applicant's financial condition and history;
and

(6) Any information to be furnished or disseminated to
any client or prospective client.

If no denial order is in effect and no proceeding is pending
under G.S. 78C-19, registration becomes effective at noon of the 30th day after
an application is filed. The Administrator may by rule or order specify an
earlier effective date and may by order defer the effective date until noon of
the 30th day after the filing of any amendment. Registration of an investment
adviser automatically constitutes registration of any investment adviser
representative who is a partner, executive officer, or director, or a person
occupying a similar status or performing similar functions. After the
Administrator institutes a proceeding under G.S. 78C-19 to postpone or deny an
application for registration, withdrawal of the application shall be allowed
only at such time and under such conditions as the Administrator may by order
determine.

(a1) The Administrator may require investment advisers
covered under federal law to file with the Administrator any documentation
filed with the Securities and Exchange Commission as a condition of doing
business in this State. This subsection does not apply to (i) an investment
adviser covered under federal law whose only clients are those described in
G.S. 78C-16(a)(2), or (ii) an investment adviser covered under federal law who
has no place of business in this State, and during the preceding 12-month
period has had not more than five clients, other than those described in G.S.
78C-16(a)(2), who are residents of this State. A notice filing under this
section may be renewed by (i) filing documents required by the Administrator
and filed with the Securities and Exchange Commission, prior to the expiration
of the notice filing, and (ii) paying the fee required under subsection (b1) of
this section. A notice filed under this section may be terminated by the
investment adviser by providing the Administrator notice of the termination,
which shall be effective upon receipt by the Administrator.

(b) Every applicant for initial or renewal
registration shall pay a filing fee of three hundred dollars ($300.00) in the
case of an investment adviser, and seventy-five dollars ($75.00) in the case of
an investment adviser representative. When an application is denied or
withdrawn, the Administrator shall retain the fee.

(b1) Every person acting as an investment adviser
covered under federal law in this State shall pay an initial filing fee of
three hundred dollars ($300.00) and a renewal notice filing fee of three
hundred dollars ($300.00).

(b2) Any person required to pay a fee under this section
may transmit through any designee any fee required by this section or by the
rules adopted pursuant to this section.

(c) A registered investment adviser may file an
application for registration of a successor, whether or not the successor is
then in existence, for the unexpired portion of the year. There shall be no
filing fee.

(d) The Administrator may by rule establish minimum net
capital requirements not to exceed one hundred thousand dollars ($100,000) for
registered investment advisers, subject to the limitations of section 222 of
the Investment Advisers Act of 1940 (15 U.S.C. § 80(b)-18a), which may include
different requirements for those investment advisers who maintain custody of
clients' funds or securities or who have discretionary authority over same and
those investment advisers who do not.

(e) The Administrator may by rule require registered
investment advisers who have custody of or discretionary authority over client
funds or securities to post surety bonds in amounts up to one hundred thousand
dollars ($100,000), subject to the limitations of section 222 of the Investment
Advisers Act of 1940 (15 U.S.C. § 80(b)-18a), and may determine their
conditions. Any appropriate deposit of cash or securities shall be accepted in
lieu of any bond so required. No bond may be required of any investment adviser
whose minimum net capital, which may be defined by rule, exceeds one hundred
thousand dollars ($100,000). Every bond shall provide for suit thereon by any
person who has a cause of action under G.S. 78C-38 and, if the Administrator by
rule or order requires, by any person who has a cause of action not arising
under this Chapter. Every bond shall provide that no suit may be maintained to
enforce any liability on the bond unless brought within the time limitations of
G.S. 78C-38(d). (1987 (Reg. Sess., 1988), c. 1098, s.
1; 1997-419, s. 17; 2001-273, s. 3; 2002-126, s. 29A.35; 2002-189, ss. 2, 3;
2003-413, s. 19.)

§ 78C-18. Post-registration provisions.

(a) Every registered investment adviser shall make and
keep such accounts, correspondence, memoranda, papers, books and records as the
Administrator by rule prescribes, subject to the limitations of section 222 of
the Investment Advisers Act of 1940 (15 U.S.C. § 80(b)-18a).

All records so required shall be preserved for three years
unless the Administrator by rule prescribes otherwise for particular types of
records.

(b) With respect to investment advisers, the
Administrator may require that certain information be furnished or disseminated
as necessary or appropriate in the public interest or for the protection of
investors and advisory clients. To the extent determined by the Administrator
in his discretion, information furnished to clients or prospective clients of
an investment adviser pursuant to the Investment Advisers Act of 1940 and the
rules thereunder may be used in whole or partial satisfaction of this
requirement.

(c) Every registered investment adviser shall file
such financial reports as the Administrator by rule prescribes, subject to the
limitations of section 222 of the Investment Advisers Act of 1940 (15 U.S.C. §
80(b)-18a).

(d) If the information contained in any document filed
with the Administrator is or becomes inaccurate or incomplete in any material
respect, the registrant or an investment adviser covered under federal law
shall promptly file a correcting amendment, if the document is filed with
respect to a registrant or when the amendment is required to be filed with the
Securities and Exchange Commission with respect to an investment adviser
covered under federal law, unless notification of the correction has been given
under G.S. 78C-16(b).

(e) All the records referred to in subsection (a) of
this section are subject at any time or from time to time to such reasonable
periodic, special, or other examinations by representatives of the
Administrator, within or without this State, as the Administrator deems
necessary or appropriate in the public interest or for the protection of
investors. For the purpose of avoiding unnecessary duplication of
examinations, the Administrator, insofar as he deems it practicable in
administering this subsection, may cooperate with the securities administrators
of other states, the Securities and Exchange Commission, and any national
securities exchange or national securities association registered under the
Securities Exchange Act of 1934. (1987 (Reg. Sess.,
1988), c. 1098, s. 1; 1997-419, s. 18.)

(a) The Administrator may by order deny, suspend or
revoke any registration, or bar or censure any registrant or any officer,
director, partner or person occupying a similar status or performing similar
functions for a registrant, from employment with a registered investment
adviser, or restrict or limit a registrant as to any function or activity of
the business for which registration is required in this State if he finds:

(1) That the order is in the public interest and;

(2) That the applicant or registrant or, in the case of
an investment adviser, any partner, officer or director, any person occupying a
similar status or performing similar functions, or any person directly or
indirectly controlling the investment adviser;

a. Has filed an application for registration which as
of its effective date, or as of any date after filing in the case of an order
denying effectiveness, was incomplete in any material respect or contained any
statement which was, in light of the circumstances under which it was made,
false or misleading with respect to any material fact;

b. Has willfully violated or willfully failed to
comply with any provision of this Chapter or Chapter 78A or any rule or order
under this Chapter or Chapter 78A;

c. Has been convicted, within the past 10 years, of
any misdemeanor involving a security or the financial services business, or any
aspect of the securities business, or the financial services business, or any
felony;

d. Is permanently or temporarily enjoined by any court
of competent jurisdiction from engaging in or continuing any conduct or
practice involving any aspect of the securities or financial services business;

e. Is the subject of an order of the Administrator
denying, suspending, barring, revoking, restricting or limiting registration as
a dealer, salesman, investment adviser or investment adviser representative;

f. Is the subject of an adjudication or determination
within the past five years by a securities, commodities or other financial
services regulatory agency or an administrator of such laws of another state or
a court of competent jurisdiction that the person has violated the Securities
Act of 1933, the Securities Exchange Act of 1934, the Investment Advisers Act
of 1940, the Investment Company Act of 1940 or the Commodity Exchange Act, or
the securities or commodities law of any other state or any other financial
services regulatory laws as the Administrator may designate by rule;

g. Has engaged in dishonest or unethical practices in
the securities or financial services business;

h. Is insolvent, either in the sense that his
liabilities exceed his assets or in the sense that he cannot meet his
obligations as they mature; but the Administrator may not enter an order against
an investment adviser under this clause without a finding of insolvency as to
the investment adviser;

i. Is not qualified on the basis of such factors as
training, experience, and knowledge of the securities business, except as
otherwise provided in subsection (b) of this section;

j. Has failed reasonably to supervise his salesmen or
employees if he is a dealer or his investment adviser representatives or
employees if he is an investment adviser to assure their compliance with this
Chapter; or

k. Has failed to pay the proper filing fee; but the
Administrator may enter only a denial order under this clause, and he shall
vacate any such order when the deficiency has been corrected.

The Administrator may not institute a suspension or
revocation proceeding on the basis of a fact or transaction known to him when
registration became effective unless the proceeding is instituted within the
next 120 days.

(b) The following provisions govern the application of
G.S. 78C-19(a)(2)i:

(1) The Administrator may not enter an order against an
investment adviser on the basis of the lack of qualification of any person
other than (i) the investment adviser himself if he is an individual or (ii) an
investment adviser representative.

(2) The Administrator may not enter an order solely on
the basis of lack of experience if the applicant or registrant is qualified by
training or knowledge or both.

(3) The Administrator shall consider that an investment
adviser representative who will work under the supervision of a registered
investment adviser need not have the same qualifications as an investment
adviser.

(4) The Administrator shall consider that an investment
adviser or investment adviser representative is not necessarily qualified
solely on the basis of experience as a dealer or salesman.

(5) The Administrator may by rule provide for an
examination, including an examination developed or approved by an organization
of securities administrators, which examination may be written or oral or both,
to be taken by any class of or all applicants. The Administrator may by rule or
order waive the examination requirement as to a person or class of persons if the
Administrator determines that the examination is not necessary for the
protection of advisory clients.

(c) The Administrator may by order summarily postpone
or suspend registration pending final determination of any proceeding under
this section. Upon the entry of the order, the Administrator shall promptly
notify the applicant or registrant, as well as the employer or prospective
employer if the applicant or registrant is an investment adviser
representative, that it has been entered and of the reasons therefor and that
within 20 days after the receipt of a written request the matter will be
scheduled for hearing in accordance with Chapter 150B of the General Statutes.
If no request for a hearing, other responsive pleading, or submission is
received by the Administrator within 30 business days of receipt of service of
notice of the order upon the applicant or registrant and no hearing is ordered
by the Administrator, the order shall become final and remain in effect unless
it is modified or vacated by the Administrator. If a hearing is requested or
ordered, the Administrator, after notice of and opportunity for hearing, may
modify or vacate the order or extend it until final determination.

(d) If the Administrator finds that any registrant or
applicant for registration is no longer in existence or has ceased to do
business as an investment adviser or investment adviser representative, or is
subject to an adjudication of mental incompetence or to the control of a
committee, conservator, or guardian, or cannot be located after reasonable
search, the Administrator may by order cancel the registration or application.

(e) Withdrawal from registration as an investment
adviser or investment adviser representative becomes effective 90 days after
receipt of an application to withdraw or within such shorter period of time as
the Administrator may determine, unless a revocation or suspension proceeding
is pending when the application is filed or a proceeding to revoke or suspend
or to impose conditions upon the withdrawal is instituted within 90 days after
the application is filed. If a proceeding is pending or instituted, withdrawal
becomes effective at such time and upon such conditions as the Administrator by
order determines. If no proceeding is pending or instituted and withdrawal
automatically becomes effective, the Administrator may nevertheless institute a
revocation or suspension proceeding under G.S. 78C-19(a)(2)b within one year
after withdrawal became effective and enter a revocation or suspension order as
of the last date on which registration was effective.

(f) No order may be entered under any part of this
section except the first sentence of subsection (c) of this section without (i)
appropriate prior notice to the applicant or registrant (as well as the employer
or prospective employer if the applicant or registrant is an investment adviser
representative), (ii) opportunity for hearing, and (iii) written findings of
fact and conclusions of law. (1987 (Reg. Sess., 1988),
c. 1098, s. 1; 1997-462, s. 7; 2001-126, s. 5.)

§ 78C-20. Methods of registration.

(a) All applications for initial and renewal
registrations or notice filings required under G.S. 78C-17 shall be filed with
the Investment Adviser Registration Depository (IARD) operated by the National
Association of Securities Dealers.

(a) This Chapter shall be administered by the
Secretary of State. The Secretary of State as Administrator may delegate all or
part of the authority under this Chapter to the Deputy Securities Administrator
including, but not limited to, the authority to conduct hearings, and make,
execute and issue final agency orders and decisions. The Secretary of State may
appoint such clerks and other assistants as may from time to time be needed.
The Secretary of State may designate one or more hearing officers for the
purpose of conducting administrative hearings.

(b) It is unlawful for the Administrator or any of his
officers or employees to use for personal benefit any information which is
filed with or obtained by the Administrator and which is not made public. No
provision of this Chapter authorizes the Administrator or any of his officers
or employees to disclose any such information except among themselves or when
necessary or appropriate in a proceeding or investigation under this Chapter.
No provision of this Chapter either creates or derogates from any privilege
which exists at common law or otherwise when documentary or other evidence is
sought under a subpoena directed to the Administrator or any of his officers or
employees.

(c) All fees provided for under this Chapter shall be
collected by the Administrator and shall be paid over to the State Treasurer to
go into the General Fund. (1987 (Reg. Sess., 1988), c.
1098, s. 1; 2001-126, s. 10.)

§ 78C-27. Investigations and subpoenas.

(a) The Administrator in his discretion:

(1) May make any investigation within or outside of
this State as the Administrator deems necessary to determine whether any person
has violated or is about to violate any provision of this Chapter or any rule
or order hereunder, or to aid in the enforcement of this Chapter or in the
prescribing of rules and forms hereunder;

(2) May require or permit any person to file a
statement in writing, under oath or otherwise as the Administrator determines,
as to all the facts and circumstances concerning the matter to be investigated;
and

(3) May publish information concerning any violation of
this Chapter or any rule or order hereunder.

(b) For the purpose of any investigation or proceeding
under this Chapter, the Administrator or any officer designated by him may
administer oaths and affirmations, subpoena witnesses, compel their attendance,
take evidence and require the production of any books, papers, correspondence,
memoranda, agreements, or other documents or records which the Administrator
deems relevant or material to the inquiry.

(c) In case of contumacy by, or refusal to obey a
subpoena issued to any person, any court of competent jurisdiction, upon
application by the Administrator, may issue to the person an order requiring
him to appear before the Administrator, or the officer designated by him, there
to produce documentary evidence if so ordered or to give evidence touching the
matter under investigation or in question. Failure to obey the order of the
court may be punished by the court as a contempt of court.

(d) The Administrator may act under subsection (b) of
this section or apply under subsection (c) of this section to enforce subpoenas
in this State at the request of a securities agency or administrator of any
state if the alleged activities constituting a violation for which the
information is sought would be a violation of this Chapter or any rule
hereunder if the alleged activities had occurred in this State. (1987 (Reg. Sess., 1988), c. 1098, s. 1; 1997-462, s. 8.)

§ 78C-28. Injunctions; cease and desist orders; civil
penalties.

(a) Whenever it appears to the Administrator that any
person has engaged or is about to engage in any act or practice constituting a
violation of any provision of this Chapter or any rule or order hereunder, he
may in his discretion bring an action in any court of competent jurisdiction to
enjoin the acts or practices and to enforce compliance with this Chapter or any
rule or order hereunder. Upon a proper showing a permanent or temporary
injunction, restraining order, or writ of mandamus shall be granted and a
receiver or conservator may be appointed for the defendant or the defendant's
assets. In addition to any other remedies provided by this Chapter, the
Administrator may apply to the court hearing this matter for an order of
restitution whereby the defendant in such action shall be ordered to make
restitution of those sums shown by the Administrator to have been obtained by
him in violation of any of the provisions of this Chapter. Such restitution
shall be payable, in the discretion of the court, to the Administrator or
receiver appointed pursuant to this section for the benefit of those persons
whose assets were obtained in violation of this Chapter, or directly to those
persons. The court may not require the Administrator to post a bond.

(b) (1) If the
Administrator determines after giving notice of an opportunity for a hearing,
that any person has engaged in, or is about to engage in, any act or practice
constituting a violation of any provision of this Chapter or any rule or order
hereunder, he may order such person to cease and desist from such unlawful act
or practice and take such affirmative action as in the judgment of the
Administrator will carry out the purposes of this Chapter.

(2) If the Administrator makes written findings of fact
that the public interest will be irreparably harmed by delay in issuing an
order under G.S. 78C-28(b)(1), the Administrator may issue a temporary cease
and desist order. Upon the entry of a temporary cease and desist order, the
Administrator shall promptly notify in writing the person subject to the order
that such order has been entered, the reasons therefor, and that within 20 days
after the receipt of a written request from such person the matter shall be
scheduled for hearing in accordance with Chapter 150B of the General Statutes
to determine whether or not the order shall become permanent and final. If no
request for a hearing, other responsive pleading, or submission is received by
the Administrator within 30 business days of receipt of service of notice of
the order upon the person subject to the order and no hearing is ordered by the
Administrator, the order shall become final and remain in effect unless it is
modified or vacated by the Administrator. If a hearing is requested or ordered,
the Administrator, after giving notice of an opportunity for a hearing to the
person subject to the order, shall by written findings of fact and conclusion
of law, vacate, modify, or make permanent the order.

(3) No order under subsection (b) of this section,
except an order issued pursuant to G.S. 78C-28(b)(2), may be entered without
prior notice or an opportunity for hearing. The Administrator may vacate or
modify an order under subsection (b) of this section upon his finding that the
conditions which required such an order have changed and that it is in the
public interest to so vacate or modify.

(4) A final order issued pursuant to the provisions of
subsection (b) of this section shall be subject to review as provided in G.S.
78C-29.

(c) The Administrator may issue an order against an
applicant, registered person, or other person who willfully violates this
Chapter or a rule or order of the Administrator under this Chapter:

(1) Imposing a civil penalty of up to two thousand five
hundred dollars ($2,500) for a single violation or of up to twenty-five
thousand dollars ($25,000) for multiple violations in a single proceeding or a
series of related proceedings; and

(2) Requiring reimbursement of the costs of
investigation.

The clear proceeds of civil penalties imposed under this
subsection shall be remitted to the Civil Penalty and Forfeiture Fund in
accordance with G.S. 115C-457.2. Any reimbursement imposed under this
subsection shall be paid into the General Fund. No order authorized by this
subsection may be entered without prior notice of an opportunity for a hearing
conducted pursuant to Article 3 of Chapter 150B of the General Statutes. (1987 (Reg. Sess., 1988), c. 1098, s. 1; 1991, c. 456, s. 7;
1997-462, s. 9; 1998-215, s. 121; 2001-126, s. 6.)

§ 78C-29. Judicial review of orders.

(a) Any person aggrieved by a final order of the
Administrator may obtain a review of the order in the Superior Court of Wake
County by filing in court, within 30 days after a written copy of the decision
is served upon the person by personal service or by registered or certified
mail, a written petition praying that the order be modified or set aside in
whole or in part. A copy of the petition shall be forthwith served upon the
Administrator, and thereupon the Administrator shall certify and file in court
a copy of the filing and evidence upon which the order was entered. When these
have been filed, the court has exclusive jurisdiction to affirm, modify,
enforce, or set aside the order, in whole or in part. The findings of the
Administrator as to the facts, if supported by competent, material and substantial
evidence, are conclusive. If either party applies to the court for leave to
adduce additional material evidence, and shows to the satisfaction of the court
that there were reasonable grounds for failure to adduce the evidence in the
hearings before the Administrator, the court may order the additional evidence
to be taken before the Administrator and to be adduced upon the hearing in such
manner and upon such conditions as the court considers proper. The
Administrator may modify his findings and order by reason of the additional
evidence and shall file in court the additional evidence together with any
modified or new findings or order. The judgment of the court is final, subject
to review by the Court of Appeals.

(b) The commencement of proceedings under subsection
(a) of this section does not, unless specifically ordered by the court, operate
as a stay of the Administrator's order. (1987 (Reg.
Sess., 1988), c. 1098, s. 1.)

§ 78C-30. Rules, forms, orders, and hearings.

(a) The Administrator may from time to time make,
amend, and rescind such rules, forms, and orders as are necessary to carry out
the provisions of this Chapter, including rules and forms governing
registration, applications, and reports, and defining any terms, whether or not
used in this Chapter, insofar as the definitions are not inconsistent with the
provisions of this Chapter. For the purpose of rules and forms the
Administrator may classify persons, and matters within his jurisdiction, and
prescribe different requirements for different classes.

(b) No rule, form, or order may be made, amended, or
rescinded unless the Administrator finds that the action is necessary or
appropriate in the public interest or for the protection of investors and
clients and consistent with the purposes fairly intended by the policy and
provisions of this Chapter. In prescribing rules and forms the Administrator
may cooperate with the securities administrators of the other states and the
Securities and Exchange Commission with a view to effectuating the policy of
this statute to achieve maximum uniformity in the form and content of
registrations, applications, and reports wherever practicable.

(c) The Administrator may by rule or order prescribe
(i) the form and content of financial statements required under this Chapter,
(ii) the circumstances under which consolidated financial statements shall be
filed, and (iii) whether any required financial statements shall be certified
by independent or certified public accountants. All financial statements required
to be filed with the Administrator shall be audited and shall be prepared in
accordance with generally accepted accounting principles, except where the
Administrator shall by rule or order provide otherwise.

(d) The Administrator may by rule or order require the
filing of any prospectus, pamphlet, circular, form letter, advertisement, or
other sales literature or advertising communication addressed or intended for
distribution to prospective investors, including clients or prospective clients
of an investment adviser.

(e) All rules and forms of the Administrator shall be
published.

(f) No provision of this Chapter imposing any
liability applies to any act done or omitted in good faith in conformity with
any rule, form, or order of the Administrator, notwithstanding that the rule,
form, or order may later be amended or rescinded or be determined by judicial
or other authority to be invalid for any reason.

(g) Every hearing in an administrative proceeding
shall be public unless the Administrator in his discretion grants a request
joined in by all the respondents that the hearing be conducted privately. (1987 (Reg. Sess., 1988), c. 1098, s. 1; 2003-413, s. 20.)

§ 78C-31. Administrative files and opinions.

(a) A document is filed when it is received by the
Administrator.

(b) The Administrator shall keep a register of all
applications for registration which are or have been effective under this
Chapter and all denial, suspension, or revocation orders or similar orders
which have been entered under this Chapter. The register shall be open for
public inspection.

(c) The information contained in or filed with any
registration, application, or report may be made available to the public under
such rules as the Administrator prescribes.

(c1) The files and records of the Administrator relating
to criminal investigations and enforcement proceedings undertaken pursuant to
this Chapter are subject to the provisions of G.S. 132-1.4.

(c2) The files and records of the Administrator relating
to noncriminal investigations and enforcement proceedings undertaken pursuant
to this Chapter shall not be subject to inspection and examination pursuant to
G.S. 132-6 until the investigations and proceedings are completed and cease to
be active.

(c3) Any information obtained by the Administrator from
any law enforcement agency, administrative agency, or regulatory organization
on a confidential or otherwise restricted basis in the course of an
investigation or proceeding undertaken pursuant to this Chapter shall be
confidential and exempt from G.S. 132-6 to the same extent that it is
confidential in the possession of the providing agency or organization.

(d) Upon request and at such reasonable charges as the
Administrator prescribes, the Administrator shall furnish to any person photostatic
or other copies (certified under the seal of office if requested) of any entry
in the register or any document which is a matter of public record. In any
proceeding or prosecution under this Chapter, any copy so certified is prima
facie evidence of the contents of the entry or document certified.

(1) Engages in the business of advising others, for
compensation, either directly or through publications or writings, as to the
value of securities or as to the advisability of investing in, purchasing, or
selling securities, or who, for compensation and as a part of a regular
business, issues or promulgates analyses or reports concerning securities, in
violation of G.S. 78C-8(b), G.S. 78C-16(a), (a1), or (b) (an action pursuant to
a violation of G.S. 78C-16(b) may not be maintained except by those persons who
directly received advice from the unregistered investment adviser representative),
G.S. 78C-10(b), or of any rule or order under G.S. 78C-30(d) which requires the
affirmative approval of sales literature before it is used, or

(2) Receives, directly or indirectly, any consideration
from another person for advice as to the value of securities or their purchase
or sale, whether through the issuance of analyses, reports or otherwise and
employs any device, scheme, or artifice to defraud such other person or engages
in any act, practice or course of business which operates or would operate as a
fraud or deceit on such other person, in violation of G.S. 78C-8(a)(1) or (2),

is liable to any person who is given such advice in such
violation, who may sue either at law or in equity to recover (i) the
consideration paid for such advice together with interest thereon at the legal
rate as provided in G.S. 24-1 from the date of payment of the consideration,
plus (ii) the actual damages to such person proximately caused by such
violation, plus (iii) costs of the action and reasonable attorneys' fees. An
action based on violation of G.S. 78C-8(b) may not prevail where the person
accused of the violation sustains the burden of proof that he did not know, and
in the exercise of reasonable care could not have known of the existence of the
facts by reason of which the liability is alleged to exist.

(b) (1) Every person
who directly or indirectly controls a person liable under subsection (a) of
this section, including every partner, officer, or director of the person,
every person occupying a similar status or performing similar functions, and
every dealer or salesman who materially aids in the conduct giving rise to the
liability is liable jointly and severally with and to the same extent as the
person, unless able to sustain the burden of proof that the person did not
know, and in the exercise of reasonable care could not have known, of the
existence of the facts by reason of which the liability is alleged to exist.

(2) Unless liable under subdivision (1) of this
subsection, every employee or associate of a person liable under subsection (a)
of this section who materially aids in the conduct giving rise to the liability
and every other person who materially aids in the conduct giving rise to the
liability is liable jointly and severally with and to the same extent as the
person if the employee or associate or other person actually knew of the
existence of the facts by reason of which the liability is alleged to exist.

(3) There is contribution among the several persons
liable under subdivisions (1) and (2) of this subsection as provided among tort-feasors
pursuant to Chapter 1B of the General Statutes.

(c) Every cause of action under this statute survives
the death of any person who might have been a plaintiff or defendant.

(d) No person may sue under this section more than
three years after the rendering of investment advice in violation of G.S. 78C-16.

No person may sue under this section for any other violation
of this Chapter more than three years after the person discovers facts
constituting the violation, but in any case no later than five years after the
rendering of investment advice, except that if a person who may be liable under
this section engages in any fraudulent or deceitful act that conceals the
violation or induces the person to forgo or postpone commencing an action based
upon the violation, the suit may be commenced not later than three years after
the person discovers or should have discovered that the act was fraudulent or
deceitful.

(e) No person who has made or engaged in the
performance of any contract in violation of any provision of this Chapter or
any rule or order hereunder, or who has acquired any purported right under such
contract with knowledge of the facts by reason of which its making or
performance was in violation, may base any suit on the contract.

(f) Any condition, stipulation, or provision binding
any person receiving any investment advice to waive compliance with any
provision of this Chapter or any rule or order hereunder is void.

(g) The rights and remedies provided by this Chapter
are in addition to any other rights or remedies that may exist at law or in
equity, but this Chapter does not create any cause of action not specified in
this section or G.S. 78C-17(e). If the requirements of Chapter 1D of the
General Statutes are met, punitive damages are available to the extent provided
in that Chapter. (1987 (Reg. Sess., 1988), c. 1098, s.
1; 1991, c. 456, s. 8; 2003-413, ss. 21-24.)

§ 78C-39. Criminal penalties.

(a) Any person who willfully violates any provision of
this Chapter except G.S. 78C-8(a)(1), 78C-8(a)(2), 78C-8(b), or 78C-9 is guilty
of a Class I felony.

(a1) Any person who willfully violates any rule or order
under this Chapter is guilty of a Class I felony. No person may be imprisoned
for the violation of any rule if the person proves that the person had no
knowledge of the rule. It is an affirmative defense to a charge of violating an
order under this Chapter that the person had no knowledge of the order.

(a2) Any person who willfully violates G.S. 78C-8(a)(1),
78C-8(a)(2), or 78C-8(b) is guilty of a felony. If the losses caused, directly
or indirectly, by the violator for a single act or for a series of related acts
in a common scheme or plan is one hundred thousand dollars ($100,000) or more,
the person is guilty of a Class C felony. If the losses caused, directly or
indirectly, by the violator for a single act or for a series of related acts in
a common scheme or plan is less than one hundred thousand dollars ($100,000),
the person is guilty of a Class H felony.

(a3) Any person who willfully violates G.S. 78C-9
knowing the statement made to be false or misleading in any material respect is
guilty of a Class H felony. Any other willful violation of G.S. 78C-9
constitutes a Class 2 misdemeanor.

(a4) A person is guilty of a Class H felony if the
person willfully does any of the following for the purpose of interfering with
the performance of any audit, examination, or investigation by the
Administrator under this Chapter:

(1) Makes or causes to be made to the Administrator or
the Administrator's designated representative any false or misleading oral or
written statement.

(2) Creates, causes to be made, or delivers any record,
report, or document knowing that it is false or misleading in any material
respect.

(3) Destroys or alters any record, report, or document.

(4) Conceals or secretes any record, report, or
document.

(b) The Administrator may refer such evidence as is
available concerning violations of this Chapter or of any rule or order
hereunder to the proper district attorney, who may, with or without such a
reference, institute the appropriate criminal proceedings under this Chapter.
Upon receipt of a reference, the district attorney may request that a duly
employed attorney of the Administrator prosecute or assist in the prosecution
of the violation or violations on behalf of the State. Upon approval of the
Administrator, the employee may be appointed a special prosecutor for the
district attorney to prosecute or assist in the prosecution of the violations without
receiving compensation from the district attorney. Such a special prosecutor
shall have all the powers and duties prescribed by law for district attorneys
and such other powers and duties as are lawfully delegated to the special
prosecutor by the district attorney for violations of this Chapter.

(c) Nothing in this Chapter limits the power of the
State to punish any person for any conduct which constitutes a crime by statute
or at common law. (1987 (Reg. Sess., 1988), c. 1098,
s. 1; 1991, c. 456, s. 9; 2003-413, s. 25.)

§ 78C-40. Burden of proof.

In a civil or administrative proceeding brought under this
Chapter, the burden of proving an exemption or an exception from a definition
is upon the person claiming it. In a criminal proceeding brought under this
Chapter, the State has no initial burden of producing evidence to show that the
defendant's actions do not fall within the exemption or exceptions; however,
once the defendant introduces evidence to show that his conduct is within the
exemption or exception, the burden of persuading the trier of fact that the
exemption or exception does not apply falls upon the State. (1987 (Reg. Sess., 1988), c. 1098, s. 1.)

§§ 78C-41 through 78C-45: Reserved for future codification
purposes.

Article 6.

Miscellaneous Provisions.

§ 78C-46. Scope of the Chapter; service of process.

(a) G.S. 78C-8, 78C-16(a) and (b), 78C-10, and 78C-38
apply when any act instrumental in effecting prohibited conduct is done in this
State, whether or not either party is then present in this State.

(b) Every applicant for registration under this
Chapter shall file with the Administrator, in such form as he by rule
prescribes, an irrevocable consent appointing the Administrator or his
successor in office to be his attorney to receive service of any lawful process
in any noncriminal suit, action or proceeding against him or his successor,
executor or administrator which arises under this Chapter or any rule or order
hereunder after the consent has been filed, with the same force and validity as
if served personally on the person filing the consent. A person who has filed
such a consent in connection with a previous registration or notice filing need
not file another. Service may be made by leaving a copy of the process in the
office of the Administrator, but it is not effective unless (i) the plaintiff,
who may be the Administrator in a suit, action, or proceeding instituted by
him, forthwith sends notice of the service and a copy of the process by
registered or certified mail to the defendant or respondent at his last address
on file with the Administrator, and (ii) the plaintiff's affidavit of
compliance with the subsection is filed in the case on or before the return day
of the process, if any, or within such further time as the court allows.

(c) When any person, including any nonresident of this
State, engages in conduct prohibited or made actionable by this Chapter or any
rule or order hereunder, and he has not filed a consent to service of process
under subsection (b) of this section and personal jurisdiction over him cannot
otherwise be obtained in this State, that conduct shall be considered
equivalent to his appointment of the Administrator or his successor in office
to be his attorney to receive service of any lawful process in any noncriminal
suit, action, or proceeding against him or his successor, executor or
administrator which grows out of that conduct and which is brought under this Chapter
or any rule or order hereunder with the same force and validity as if served on
him personally. Service may be made by leaving a copy of the process in the
office of the Administrator, and it is not effective unless (i) the plaintiff,
who may be the Administrator in a suit, action, or proceeding instituted by
him, forthwith sends notice of the service and a copy of the process by
registered or certified mail to the defendant or respondent at his last known
address or takes other steps which are reasonably calculated to give actual
notice, and (ii) the plaintiff's affidavit of compliance with this subsection
is filed in the case on or before the return day of the process, if any, or
within such further time as the court allows.

(d) When process is served under this section, the
court, or the Administrator in a proceeding before him, shall order such
continuance as may be necessary to afford the defendant or respondent
reasonable opportunity to defend. (1987 (Reg. Sess.,
1988), c. 1098, s. 1; 1997-419, s. 19.)

§ 78C-47. Statutory policy.

This Chapter shall be so construed as to effectuate its
general purpose to make uniform the law of those states which enact it and to
coordinate the interpretation and administration of this Chapter with the
related federal regulation. Nothing in this Chapter shall be construed to
limit or preclude the applicability of any provision of Chapters 78A or 150B of
the General Statutes. (1987 (Reg. Sess., 1988), c.
1098, s. 1.)

§ 78C-48. Severability of provisions.

If any provision of this Chapter or the application thereof
to any person or circumstance is held invalid, the invalidity shall not affect
other provisions or applications of the Chapter which can be given effect
without the invalid provision or application, and to this end the provisions of
this Chapter are severable. (1987 (Reg. Sess., 1988),
c. 1098, s. 1.)

This Article may be cited as the "Uniform Athlete Agents
Act". (2003-375, s. 2.)

§ 78C-86. Definitions.

The following definitions apply in this Article:

(1) Agency contract. - An agreement in which a student-athlete
authorizes a person to negotiate or solicit on behalf of the student-athlete a
professional-sports-services contract or an endorsement contract.

(2) Athlete agent. - An individual who enters into an
agency contract with a student-athlete or, directly or indirectly, recruits or
solicits a student-athlete to enter into an agency contract. The term includes
an individual who represents to the public that the individual is an athlete
agent. The term does not include a spouse, parent, sibling, or guardian of the
student-athlete or an individual acting solely on behalf of a professional
sports team or professional sports organization.

(3) Athletic director. - An individual responsible for
administering the overall athletic program of an educational institution or, if
an educational institution has separately administered athletic programs for
male students and female students, the athletic program for males or the
athletic program for females, as appropriate.

(4) Contact. - A communication, direct or indirect,
between an athlete agent and a student-athlete to recruit or solicit the
student-athlete to enter into an agency contract.

(5) Endorsement contract. - An agreement under which a
student-athlete is employed or receives consideration to use on behalf of the
other party any value that the student-athlete may have because of publicity,
reputation, following, or fame obtained because of athletic ability or
performance.

(6) Intercollegiate sport. - A sport played at the
collegiate level for which eligibility requirements for participation by a
student-athlete are established by a national association for the promotion or
regulation of collegiate athletics.

(7) Person. - An individual, company, corporation,
partnership, association, or any other legal or commercial entity.

(8) Professional-sports-services contract. - An
agreement under which an individual is employed or agrees to render services as
a player on a professional sports team, with a professional sports
organization, or as a professional athlete.

(9) Record. - Information that is inscribed on a
tangible medium or that is stored in an electronic or other medium and is
retrievable in perceivable form.

(10) Registration. - A certificate issued by the
Secretary of State evidencing that a person has satisfied the requirements of
an athlete agent pursuant to this Article.

(11) Student-athlete. - An individual who engages in, is
eligible to engage in, or may be eligible in the future to engage in any
intercollegiate sport. If an individual is permanently ineligible to
participate in a particular intercollegiate sport, the individual is not a
student-athlete for purposes of that sport. (2003-375,
s. 2.)

§ 78C-87. Service of process; subpoenas.

(a) By acting as an athlete agent in this State, a
nonresident individual appoints the Secretary of State as the individual's
agent for service of process in any civil action in this State related to the
individual's acting as an athlete agent in this State.

(b) The Secretary of State may issue subpoenas for any
material that is relevant to the administration of this Article. (2003-375, s. 2.)

(a) Except as otherwise provided in this section, an
individual may not act as an athlete agent in this State without holding a
certificate of registration under G.S. 78C-90 or G.S. 78C-92.

(b) Before being issued a certificate of registration,
an individual may act as an athlete agent in this State for all purposes except
signing an agency contract if: (i) a student-athlete or another person acting
on behalf of the student-athlete initiates communication with the individual;
and (ii) within seven days after an initial act as an athlete agent, the
individual submits an application for registration as an athlete agent in this
State.

(c) A North Carolina licensed and resident attorney
may act as an athlete agent in this State for all purposes without registering
pursuant to this section if the attorney neither advertises directly for, nor
solicits, any student-athlete by representing to any person that the attorney
has special experience or qualifications with regard to representing student-athletes
and represents no more than two student-athletes.

(d) An agency contract resulting from conduct in
violation of this section is void, and the athlete agent shall return any
consideration received under the contract. (2003-375,
s. 2.)

§ 78C-89. Registration as athlete agent; form; requirements.

(a) An individual seeking registration as an athlete
agent shall submit an application for registration to the Secretary of State in
a form prescribed by the Secretary of State. The application must be in the
name of an individual and, except as otherwise provided in subsection (b) of
this section, signed or otherwise authenticated by the applicant under penalty
of perjury and must state or contain the following:

(1) The name of the applicant and the address of the
applicant's principal place of business.

(2) The name of the applicant's business or employer,
if applicable.

(3) Any business or occupation engaged in by the
applicant for the five years immediately preceding the date of submission of
the application.

(4) A description of the applicant's:

a. Formal training as an athlete agent.

b. Practical experience as an athlete agent.

c. Educational background relating to the applicant's
activities as an athlete agent.

(5) The names and addresses of three individuals not
related to the applicant who are willing to serve as references.

(6) The name, sport, and last known team for each
individual for whom the applicant acted as an athlete agent during the five
years immediately preceding the date of submission of the application.

(7) The names and addresses of all persons who are:

a. With respect to the athlete agent's business if it
is not a corporation, the partners, members, officers, managers, associates, or
profit-sharers of the business.

b. With respect to a corporation employing the athlete
agent, the officers, directors, and any shareholder of the corporation having
an interest of five percent (5%) or greater.

(8) Whether the applicant or any person named under
subdivision (7) of this subsection has been convicted of a crime that, if
committed in this State, would be a crime involving moral turpitude or a felony
and identify the crime.

(9) Whether there has been any administrative or
judicial determination that the applicant or any person named under subdivision
(7) of this subsection has made a false, misleading, deceptive, or fraudulent
representation.

(10) Any instance in which the conduct of the applicant
or any person named under subdivision (7) of this subsection resulted in the
imposition of a sanction, suspension, or declaration of ineligibility to
participate in an interscholastic or intercollegiate athletic event on a
student-athlete or educational institution.

(11) Any sanction, suspension, or disciplinary action
taken against the applicant or any person named under subdivision (7) of this
subsection arising out of occupational or professional conduct.

(12) Whether there has been any denial of an application
for, suspension or revocation of, or refusal to renew the registration or
licensure of the applicant or any person named under subdivision (7) of this
subsection as an athlete agent in any state.

(b) An individual who has submitted an application for
registration or licensure as an athlete agent in another state or who holds a
certificate of registration or licensure as an athlete agent in another state
may submit a copy of the application and certificate in lieu of submitting an
application in the form prescribed pursuant to subsection (a) of this section.
The Secretary of State shall accept the application and the certificate from
the other state as an application for registration in this State if the
application to the other state satisfied all of the following criteria:

(1) Was submitted in the other state within six months
immediately preceding the submission of the application in this State and the
applicant certifies that the information contained in the application is
current.

(2) Contains information substantially similar to or
more comprehensive than that required in an application submitted in this
State.

(3) Was signed by the applicant under penalty of
perjury.

(c) An application filed under this section is a
"public record" within the meaning of Chapter 132 of the General
Statutes. (2003-375, s. 2.)

§ 78C-90. Certificate of registration; issuance or denial;
renewal.

(a) Except as otherwise provided in subsection (b) of
this section, the Secretary of State shall issue a certificate of registration
to an individual who complies with G.S. 78C-89(a) or whose application has been
accepted under G.S. 78C-89(b).

(b) The Secretary of State may refuse to issue a
certificate of registration if the Secretary of State determines that the
applicant has engaged in conduct that has a significant adverse effect on the
applicant's fitness to act as an athlete agent. In making the determination,
the Secretary of State may consider whether the applicant has:

(1) Been convicted of a crime that, if committed in
this State, would be a crime involving moral turpitude or a felony.

(2) Made a materially false, misleading, deceptive, or
fraudulent representation in the application or as an athlete agent.

(3) Engaged in conduct that would disqualify the
applicant from serving in a fiduciary capacity.

(4) Engaged in conduct prohibited by G.S. 78C-98.

(5) Had a registration or licensure as an athlete agent
suspended, revoked, or denied or been refused renewal of registration or
licensure as an athlete agent in any state.

(6) Engaged in conduct the consequence of which was
that a sanction, suspension, or declaration of ineligibility to participate in
an interscholastic or intercollegiate athletic event was imposed on a student-athlete
or educational institution.

(7) Engaged in conduct that significantly adversely
reflects on the applicant's credibility, honesty, or integrity.

(c) In making a determination under subsection (b) of
this section, the Secretary of State shall consider: (i) how recently the
conduct occurred; (ii) the nature of the conduct and the context in which it
occurred; and (iii) any other relevant conduct of the applicant.

(d) An athlete agent may apply to renew a registration
by submitting an application for renewal in a form prescribed by the Secretary
of State. The application for renewal must be signed by the applicant under
penalty of perjury and must contain current information on all matters required
in an original registration.

(e) An individual who has submitted an application for
renewal of registration or licensure in another state, in lieu of submitting an
application for renewal in the form prescribed pursuant to subsection (d) of
this section, may file a copy of the application for renewal and a valid
certificate of registration or licensure from the other state. The Secretary of
State shall accept the application for renewal from the other state as an
application for renewal in this State if the application to the other state
satisfied the following:

(1) Was submitted in the other state within six months
immediately preceding the filing in this State and the applicant certifies the
information contained in the application for renewal is current.

(2) Contains information substantially similar to or
more comprehensive than that required in an application for renewal submitted
in this State.

(3) Was signed by the applicant under penalty of
perjury.

(f) A certificate of registration or a renewal of a
registration is valid for one year.

(g) An application filed under this section is a
"public record" within the meaning of Chapter 132 of the General
Statutes. (2003-375, s. 2.)

§ 78C-91. Suspension; revocation; refusal to renew registration.

(a) The Secretary of State may suspend, revoke, or
refuse to renew a registration for conduct that would have justified denial of
registration under G.S. 78C-90(b).

(b) The Secretary of State may deny, suspend, revoke,
or refuse to renew a certificate of registration or licensure only after proper
notice and an opportunity for a hearing in accordance with the Administrative
Procedures Act pursuant to Article 3 of Chapter 150B of the General Statutes. (2003-375, s. 2.)

§ 78C-92. Temporary registration.

The Secretary of State may issue a temporary certificate of
registration while an application for registration or renewal of registration
is pending. (2003-375, s. 2.)

§ 78C-93. Registration; renewal of fees.

An application for registration or renewal of registration
must be accompanied by a fee in the following amount:

........... submitted in another
state.................................................................... 200.00.

(2003-375, s. 2.)

§ 78C-94. Required form of contract.

(a) An agency contract must be in a record, signed or
otherwise authenticated by the parties.

(b) An agency contract must state or contain the
following:

(1) The amount and method of calculating the
consideration to be paid by the student-athlete for services to be provided by
the athlete agent under the contract and any other consideration the athlete
agent has received or will receive from any other source for entering into the
contract or for providing the services.

(2) The name of any person not listed in the
application for registration or renewal of registration who will be compensated
because the student-athlete signed the agency contract.

(3) A description of any expenses that the student-athlete
agrees to reimburse.

(4) A description of the services to be provided to the
student-athlete.

(5) The duration of the contract.

(6) The date of execution.

(c) An agency contract must contain, in close
proximity to the signature of the student-athlete, a conspicuous notice in
boldface type in capital letters stating:

WARNING
TO STUDENT-ATHLETE

IF YOU SIGN THIS CONTRACT:

(1) YOU SHALL LOSE YOUR
ELIGIBILITY TO COMPETE AS A STUDENT-ATHLETE IN YOUR SPORT;

(2) IF YOU HAVE AN
ATHLETIC DIRECTOR, WITHIN 72 HOURS AFTER ENTERING INTO THIS CONTRACT, BOTH YOU
AND YOUR ATHLETE AGENT MUST NOTIFY YOUR ATHLETIC DIRECTOR;

(3) YOU WAIVE YOUR
ATTORNEY-CLIENT PRIVILEGE WITH RESPECT TO THIS CONTRACT AND CERTAIN INFORMATION
RELATED TO IT; AND

(4) YOU MAY CANCEL THIS
CONTRACT WITHIN 14 DAYS AFTER SIGNING IT. CANCELLATION OF THIS CONTRACT SHALL
NOT REINSTATE YOUR ELIGIBILITY.

(d) An agency contract that does not conform to this
section is voidable by the student-athlete. If a student-athlete voids an
agency contract, the student-athlete is not required to pay any consideration
under the contract or to return any consideration received from the athlete
agent to induce the student-athlete to enter into the contract.

(e) The athlete agent shall give a record of the
signed or otherwise authenticated agency contract to the student-athlete at the
time of execution.

(f) The waiver of attorney-client privilege does not
affect those privileges between client and attorney when the attorney is not an
athlete agent. (2003-375, s. 2.)

§ 78C-95. Notice to educational institution.

(a) Within 72 hours after entering into an agency
contract or before the next scheduled athletic event in which the student-athlete
may participate, whichever occurs first, the athlete agent shall give notice in
a record of the existence of the contract to the athletic director of the
educational institution at which the student-athlete is enrolled or the athlete
agent has reasonable grounds to believe the student-athlete intends to enroll.

(b) Within 72 hours after entering into an agency
contract or before the next athletic event in which the student-athlete may
participate, whichever occurs first, the student-athlete shall inform the
athletic director of the educational institution at which the student-athlete
is enrolled that he or she has entered into an agency contract. (2003-375, s. 2.)

§ 78C-96. Student-athlete's right to cancel.

(a) A student-athlete may cancel an agency contract by
giving notice of the cancellation to the athlete agent in a record within 14
days after the contract is signed.

(b) A student-athlete may not waive the right to
cancel an agency contract.

(c) If a student-athlete cancels an agency contract,
the student-athlete is not required to pay any consideration under the contract
or to return any consideration received from the athlete agent to induce the
student-athlete to enter into the contract. (2003-375,
s. 2.)

§ 78C-97. Required records; waiver of attorney-client
privilege.

(a) An athlete agent shall retain the following
records for a period of five years:

(1) The name and address of each individual represented
by the athlete agent.

(2) Any agency contract entered into by the athlete
agent.

(3) Any direct costs incurred by the athlete agent in
the recruitment or solicitation of a student-athlete to enter into an agency
contract.

(b) Records required to be retained by subsection (a)
of this section are open to inspection by the Secretary of State during normal
business hours.

(c) Where a student-athlete enters into an agency
contract regulated under this Article, the student-athlete will be deemed to
waive the attorney-client privilege with respect to records required to be
retained by subsection (a) of this section, subject to G.S. 78C-94(f). (2003-375, s. 2.)

§ 78C-98. Prohibited conduct.

(a) An athlete agent, with the intent to induce a
student-athlete to enter into an agency contract, shall not:

(1) Give any materially false or misleading information
or make a materially false promise or representation.

(2) Furnish anything of value to a student-athlete
before the student-athlete enters into the agency contract.

(3) Furnish anything of value to any individual other
than the student-athlete or another registered athlete agent.

(b) An athlete agent shall not intentionally:

(1) Initiate contact with a student-athlete unless the
athlete agent is registered under this Article.

(2) Refuse or fail to retain or permit inspection of
the records required to be retained by G.S. 78C-97.

(3) Fail to register as required by G.S. 78C-88.

(4) Provide materially false or misleading information
in an application for registration or renewal of registration.

(5) Predate or postdate an agency contract.

(6) Fail to notify a student-athlete before the student-athlete
signs or otherwise authenticates an agency contract for a particular sport that
the signing or authentication shall make the student-athlete ineligible to
participate as a student-athlete in that sport. (2003-375,
s. 2.)

§ 78C-99. Criminal penalties.

An athlete agent who violates any provision under G.S. 78C-98(a)
is guilty of a Class I felony. (2003-375, s. 2.)

§ 78C-100. Civil remedies.

(a) An educational institution has a right of action
against an athlete agent or a former student-athlete for damages caused by a
violation of this Article. In an action under this section, the court may award
costs and reasonable attorneys' fees to the prevailing party.

(b) Damages suffered by an educational institution
under subsection (a) of this section include losses and expenses incurred
because, as a result of the conduct of an athlete agent or former student-athlete,
the educational institution was injured by a violation of this Article or was
penalized, disqualified, or suspended from participation in athletics by: (i) a
national association for the promotion and regulation of athletics; (ii) an
athletic conference; or (iii) reasonable self-imposed disciplinary action taken
to mitigate sanctions likely to be imposed by an athletic organization.

(c) A right of action under this section does not
accrue until the educational institution discovers, or by the exercise of
reasonable diligence would have discovered, the violation by the athlete agent
or former student-athlete.

(d) Any liability of the athlete agent or the former
student-athlete under this section is several and not joint.

(e) This Article does not restrict rights, remedies,
or defenses of any person under law or equity. (2003-375,
s. 2.)

§ 78C-101. Administrative penalty.

The Secretary of State may assess a civil penalty against an
athlete agent not to exceed twenty-five thousand dollars ($25,000) for a
violation of this Article. (2003-375, s. 2.)

§ 78C-102. Uniformity of application and construction.

In applying and construing this Uniform Act, consideration
must be given to the need to promote uniformity of the law with respect to its
subject matter among states that enact it. (2003-375,
s. 2.)

§ 78C-103. Electronic Signatures in Global and National
Commerce Act.

The provisions of this Article governing the legal effect,
validity, or enforceability of electronic records or signatures, and of
contracts formed or performed with the use of those records or signatures,
conform to the requirements of section 102 of the Electronic Signatures in
Global and National Commerce Act, Pub. L. 106-229, 114 Stat. 464 (2000), and
supersede, modify, and limit the Electronic Signatures in Global and National
Commerce Act. (2003-375, s. 2.)

§ 78C-104. Severability.

If any provision of this Article or its application to any
person or circumstance is held invalid, the invalidity does not affect other
provisions or applications of this Article which can be given effect without
the invalid provision or application, and to this end the provisions of this
Article are severable. (2003-375, s. 2.)

§ 78C-105. Rules.

The Secretary of State may, in accordance with Chapter 150B
of the General Statutes, adopt rules necessary to carry out the provisions of
this Article. (2003-375, s. 2.)